A fight with preservationists over tearing down the former Chicago Mercantile Exchange building could hamper the chances of the billionaire Crown family and developer Tishman Speyer Properties LP to land an anchor tenant for a massive skyscraper planned for the site.
The location at the corner of Franklin and Washington Streets is one of three finalists under consideration by accounting and consulting firm Deloitte & Touche if it decides to move from Two Prudential Plaza, sources said. The other sites are vacant parcels: 111 S. Wacker Drive, where Chicago-based John Buck Co. has proposed a skyscraper; and 200 N. Riverside, where Houston real estate firm Hines Interests LP has proposed a development.
Catering to the need of big tenants for large floors, a venture between the Crowns and New York-based Tishman Speyer has expanded initial plans for a smaller building on a parking lot at the corner of Randolph and Franklin Streets.
The latest proposal calls for a structure at least 30 stories tall and containing 1 million square feet of space, sources said. By adding floors, the tower could be as much as 1.3 million square feet. Accommodating the larger floors would require expanding the parcel along Franklin, from Randolph to the old Merc’s present site.
Yet the issuance of a permit to raze the structure caught the city’s Planning Department by surprise. And even though a lawsuit isn’t likely, the Landmarks Preservation Council of Illinois vows to use public pressure to stop demolition.
A Tishman Speyer spokesman couldn’t be reached for comment.
HSA branches out: Known as an industrial firm, HSA Commercial is starting up new units in tenant representation and health-care consulting after hiring 10 employees from the third-party brokerage division of Prime Group Realty Trust, said Robert Smietana, president and chief operating officer of Chicago-based HSA.
Veteran office broker John Wilson, 47, will become president of HSA Corporate Real Estate Services, while Timothy Stanton, Robert Titzer and Wilson’s brother David will be executive vice presidents.
Montgomery Ward complex: A joint venture that includes developer Centrum Properties Inc. is changing leasing agents for E-port, the mammoth office redevelopment of the former Montgomery Ward catalog building, 600 W. Chicago Ave. A spokeswoman for Jones Lang LaSalle confirms that the Chicago-based real estate firm has been selected to take over the assignment, which had been handled by Amerimar Enterprises.
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Hines Interests LP has signed two deals totaling 65,000 square feet at Woodfield Preserve II in Schaumburg, making the project 35 percent leased. Consulting firm RSM McGladery will take 52,000 square feet of space in the 320,000-square-foot building, said Greg Van Schaack, a Hines vice president. Meanwhile, real estate services firm CB Richard Ellis Inc. has signed for 13,000 square feet.
Leasing moves: Regus Business Centres has hired CB Richard Ellis as leasing agent for its Chicago-area locations, which total 300,000 square feet of space. CB will complement Regus’ existing marketing staff.
Meanwhile, electricity supplier AES NewEnergy Inc. has signed a 15,000-square-foot lease at 550 W. Washington, owned by TrizecHahn Corp. Insignia/ESG Inc. represented AES, which is moving from 309 W. Washington.
Price potential: Despite last year’s terrible suburban leasing market and the dramatic slowdown in transactions during the fourth quarter, the prices of office buildings held steady in 2001.
While the downtown market remained strong, the amount of suburban space that was sold in 2001dropped nearly 20 percent to 3.8 million square feet, compared with a year earlier, according to a study by the Chicago office of Cushman & Wakefield Inc. Most owners decided not to sell rather than accept reduced bids from potential buyers worried about the lack of demand for space.
“There’s a pent-up supply of assets that want to be liquidated,” said Paul Lundstedt, executive director in the real estate firm’s Chicago office, who predicts that the pace of deals won’t pick up until 2003. “When we begin to absorb space again and rental rates start to go up, you’re going to see tremendous sales transaction volume.”